Viewing Month: September 1979

Tabell’s Market Letter – September 07, 1979

Tabell’s Market Letter – September 07, 1979

Tabell's Market Letter - September 07, 1979
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TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 DIVISION OF '.., … I\Ul Jiw,,,! .,4,ll,om,,,J' J!c, MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER AMERICAN STOCK eXCHANGE September 7, 1979 -. market, especially in recent years, is for market weakness to develop dUring'the month of September. Apparently, traders returning from their Labor Day holiday believed in this pattern as, on the first two trading days of September, 1979, what had been a reasonably strong stockmarket turned into somewhat of a rout. The Dow started out on Tuesday with a 15-point decline, and weakness continued throughout most of the day Wednesday with prices having slipped another 13 points by 3 o'clock. A fair por- tion of the loss was erased in strength in the last half hour, and Thursday saw an extention of that recovery. Nonetheless, the decline was of reasonably serious proportions, amounting to some 22 points on a closing basis and 32 points from Friday's intraday high through Wednesday's intra- day low. ' It all occurred, as we said, following a market which had displayed above-average strength, at least through mid-August. It is true that most major indicators had spent the latter two weeks of that month consolidating, and Friday's closing level, while a new bull-market peak on a closing basis was not the high for the move based on intraday figures. On that basis, the Dow had reached a peak of 893.60 on August 16 versus a peak of no better than 890.10 on Friday. Thus, for two weeks, the market had essentially been moving sideways. The occurrence of this sort of action, especially with the arrival of September, might appropriately have caused nervous analysts to remember the action of just a year ago. At that point, -c -1- September 11. Two days of relatively mild weakness followed, after which a five-day decline trimmed some 40 points from the index by the end of September. For the rest of September and through early October, a consolidation and rally attempt brought about a renewed move to close to the old peak in mid-October. This was followed, however, by the vicious Halloween Massacre. downswing in the last two weeks of October which, at the lows, had trimmed better than 110 points from the Dow. It took the entire remainder of 1978, some two months, for prices to reaccumulate for their subsequent recovery in the spring. In view of all of this, it is certainly worth asking the question of whether there exist similarities between the present market pattern and that which obtained during the summer and early fallof 1978. Our own view is that such is not the case. The 1978 decline, as noted above, had been preceded by a distributional pattern that built up during the entire month of August. In terms of point-and-figure activity, this distribution was substantial in its own right. The failed rally attempt in early October broadened that distribution still further. Nothing remotely similar exists in the present instance. As indicated above, the distribution preceding the present decline had lasted only two weeks, the current market's having displayed above-average vitality through mid-August. By the end of this week's two-day debacle, all existing downside objectives had been reached, and the rally attempt which occurred, was, therefore, a logical expectation., Now it is, of course, entirely possible that the sudden onset of weakness,this.week,signalized,-the start of some sort of distributional pattern which has yet to be built. There were, indeed, a number of disturbing elements in the downswing, not the least of which were the negative breadth figures of 4 to 1 on Tuesday and almost 7 to 1 on Wednesday. Any event such as this week's decline memorializes the analyst to be especially alert to any signs of ongoing deterioration. Such deterioration, however, had not yet proceeded to the disquieting stage as of last week's end. ANTHONY W. TABELL DELAFIELD, HARVEY, TAB ELL Dow-Jones Industrials (1200 PM) S & P Composite (12 00 )M) Cumulative Index (9/6/79) AWT sla 868.69 106.92 794.32 No totemenl Of expressIon of opinion or any other motter herein COntOined IS, or IS 10 be deemed jo be, directly or indirectly, on offer or Ihe solic.tot.on of on offer to buy or sel! any securIty referred 10 or mentIoned The matter IS presented merely for the convefl'e'1l;e of the subSCriber White NC behevc the sources of our informa- tion to be reliable, we In no woy represent or guarantee the accuracy Ihereof nor of the slaements mude herein Any acllon to be Token by the subscriber should be ball'ld on hiS own Invcst'gat,on and mformatlon Janney Monlgoncry Stott, Inc, os (I corporaTtOn, and Its or employees, may now have, or may later take, positions or Trades In respect fa any seCUrilles menhoned tn thtS or any fmure lSue, and sucli POSITion moy be dtrerenT from any vIews now or hereaftet c)pressed in th or any other Issue Janney Montgomery ScoT!, Inc, which tS registered With the SEC as on Investment adVisor, may gIVe adVice to Its Investme.,t and othe, customers Independently of any statements mode 11'1 th.s or 11'1 on… other Issue Further InformatIOn on any security mentioned herem IS available on request

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Tabell’s Market Letter – September 14, 1979

Tabell’s Market Letter – September 14, 1979

Tabell's Market Letter - September 14, 1979
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TABELL'S MARKET LETTER 909 STATE ROAD. PRINCETON, NEW JERSEY 08540 DIVISION OF MEMBER NEW YORK STOCK EXCHANGE, INe MEMBER AMERICAN STOCK EXCHANGE September 14, 1979 Stock market action is a phenomenon often seen thM'g!, a darkly, and the significance .'u,''''''''''o ,LV,' ',I .-, have recently been discussing in this space the four-year-cycle pattern in the StoCK market, and, as readers of that discussion will be aware, it has only recently become evident, 18 months after the fact, that a bottom of major significance in terms of that cycle probably occurred in the spring of 1978. While it was possible, of course, to suspect that this was the case for quite some time, evidence became overwhelming only this July and August as most indices moved to new bull- market highs and time began to run out on the possibility of new cycle lows being attained within any sort of a sensible time frame. Ironically, it is only in the light of this recent interpretation that we can now go back and reexamine some of the market events of 1978, events whose meaning was relatively obscure at the time, and attempt to place them in their proper perspective. The first event whose meaning was unclear at the time of its occurrence was the actual bottom itself, which took place in early March. Identification of that bottom as a major turn was far from easy. We have been rereading, for example, our own comments at the time. We did note on March 17, 1978 the fact that the steepest portion of the 1977-78 downtrend had been reversed, but we were unsure as to whether this was of short or long-term significance. The following week, commenting on possible reversal evidence, we said, All these signs. . are subtle and a good deal less dynamic than the strength of last December which later proved to be a false rally. Certainly, more confirmation in a number of areas would be appropriate before it is possible, from a technical point of view, to adapt an unreservedly bullish stance. Shortly thereafter, some six weeks after the actual low, we first drew attention to the possibility that a bottom in terms of the four-year-cycle might have occurred, but noted also, the total absence to date of technical signs of a major bottom. Quite obviously, in short perspective, the portents were somewhat less t hIm clear, In any case, the 'had ronntin,.rl its auv, rlllM'lg the summer of 1978, , on the Dow, above 900 by mid-September. This led to the second phenomenon whose mean- ing was difficult to interpret. In a surprisingly sudden downtrend, the market moved sharply lower during October as the Dow plunged to new lows under 800. There then occurred, during the first week of November, 1978, an almost classic selling climax of the type which historically has featured bear-market bottoms. Indeed, based on a number of measurements, the first week in November, 1978 reached an oversold condition which surpassed any comparable condition since 1926, including the entire period of 1929-32. All of this was easily recognizable to the technician, and our letter of that week commented on it. However, we were forced to go on to say, We are compelled to raise a more-than-moderately disquieting point. It all took place at the wrong time. The textbook climax action of last 'week occurred, not after a major downswing, but very close to a market top scored just last September. This, and the fact cannot be ignored, is totally without precedent for the last 30 years. 1978, therefore, saw two events which were extremely difficult to interpret at the time of their occurrence. The first was an apparent stock market bottom in the spring featured by a total absence of the sort of reversal signs normally associated with such bottoms. Second, those reversal signs finally occurred — but not until six months later in October-November, and they occurred at the conclusion of a short, medium-scale decline, rather than, conventionally, at the end of a major downswing. Perhaps it is our own obtuseness, but it did not occur to us, at least until recently, to view the two phenomena as being associated. Now, however, it becomes possible to view all of the 1978 action as a sort of double bottom, in whiCh the major averages reversed themselves at an early stage, totally without the usual climactic indications and in which the rest of the,market performed a cyclical reversal at a higher level and with all the conventional fireworks some six months later. This view fits neatly into the cycle pattern, which, we suggested above, only became apparent with the strength of last summer. This whole exercise of groping our way toward an explanation of the events of the last 18 months is not, in our view, totally academic. If this view is indeed the correct one, it would suggest that, from a technical point of view, the present cycle has a good deal longer to go both in terms of time and amplitude. Dow-Jones Industrials (12 00 PM) 877.22 S & P Composite (12 00 PM) 108.49 Cumulative Index (9/13/79) 798.02 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL AWT sla No statement Of expression of opinion or ony other moiler here'n contOlned IS, or ,s 10 be deemed Ie be, dnedly or mdllectly, on offer or the SOllCltollon of on one' to buy or sen any secunty referred to or mentioned The motter IS presented merely for the convel'lenCE of the subscriber While Ne bolleve the sources of our Informa tlon to be reliable, we In 1'10 way represent or guarantee the accuracy there! nor of the statements mude herem Any acTion to be token by the subscriber should be based on hiS own mvestlgatlon and Information Janney Mon!gomery Seoll, Inc, as 0 corpO(atlon, and liS offICers or employees, may now have, or may later teKe, POSitions or trades In respect to cny securities mentioned In thiS or any future Issue, and such posilion may be d,fferent from any views now or hereafter e…pressed In this O( ony other ,nue Jenney Montgomery coH, Inc. which IS registered wllh the SEC as an lI'\Vestment adVisor, mey give adVICe to Its Investment adVISOry ond othel C1.Istomers Independently of any Statements mode In thiS or In any olher Issue further information on any secunty menlloned herein IS available on request

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Tabell’s Market Letter – September 21, 1979

Tabell’s Market Letter – September 21, 1979

Tabell's Market Letter - September 21, 1979
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TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON. NEW JERSEY 08540 DIYISION OF MEMBeR NEW VORK STOCK EXCHANGe, INC MEMBEA AMEAICAN STOCK eXCHANGe September 21,.1979 is, , necessary that- we- shOtiIa; gold. The reader is herewith warned that this letter is probably the wrong source from which to gain en- lightenment on this particular topic. We have referred to gold in the past as,the barbarous relic and have noted with approval the late Premier Khrushchev's dictum that its Ultimate suitability would be for lining the walls of public washrooms. Such statements regarding a commodity which has advanced in price 150 in the past two years and 25 in the past two weeks is, our gold-loving friends tell us, a fair indication of our perspicacity on the subject. Actually, we have no apologies to make for the above record. Throughout a long career, we have failed to recommend and indeed recommended against probably thousands of investment vehicles that have appreciated as fast or faster than gold has done in the recent experience. We find ourselves no more or less chagrined at having missed gold than having missed last year's over-the-counter flyers. We are, in other words, prisoners of our unfortunate inability to regard the yellow metal as a religion rather than a commodity. There exist, however, substantial areas of agreement between our own position and that of avid believers in the gold mystique. Our skepticism regarding the metal rises from the fact that' we do not believe that the world would necessarily be a better place were gold to be adopted as a monetary standard. We do, however, share with the gold bugs a profound skepticism of the ability of governments to maintain a stable currency. ' This skepticism will be understood by anyone who takes the trouble to read history, starting with the Emperor Hammurabi who was only the first in a long string of rulers to practice debase- ment of the coinage. That gold should be rising in price at a time when currency debasement or'ising. To attribute its most recent action simply to reasonable and urlarlle doubts regard- g the ability of governments to manage their own affairs, -however, betray's, in our view, nothing more than profound ignorance of markets. To any reasonably detached observer, the whole situation is rather familiar. . The sane and sensible rationale for the investment purchase of gold noted above has long since disappeared, to be replaced by rumors about mysterious doings by Arabs, repeated by people who never met an Arab in their life. The obvious current motive of gold purchasers is that of being able to sell it to someone else at a higher price, preferably as soon as possible. Such purchases may, indeed, for the time being, prove to be justified. On a pure momentum basis, we would suggest that the near-term trend for gold is as likely to be toward higher prices as toward lower. We would, however, strongly caution against the notion that speculation on the gold market constitutes protection against inflation or indeed against anything else. We see gold, in other words, as nothing more than one of a series of commodities large num-, bers of investors have, in recent years, decided might provide protection- against what monetary authorities are doing to them. One area, 'of course, that has conspicuously failed to provide such protection is common stocks which, of course, accounts for the relative lack qf interest therein. It has been noted, however, that mindless projection of past trends is seldom the key to invest- ment success. In terms of classical wisdom, the current flight from currency' should portend nothing short of disaster for the equity market. The problem for those of us who study equity price action is that stocks refuse to act as they should on their way to a disaster. Indeed, in a long-term sense, precisely the opposite appears to be the case, suggesting ,that in the future, unlike the past, the neglected area Of common stocks may provide the best available shield against currency debasement. ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL Dow-Jones Industrials (1200 PM) S 8. P Composite (12 00 PM) Cumulative Index (9120179) 890.87 110.22 801. 08 AWTsla No statement or e)(prenlOn of opinIOn or any other motter herein contolned IS, or to be deemed to be, directly or indirectly, an offer or the OIICltotlon of on offer to buy or sell any scctmry referred to or menlfoned The morrer JS presened merely for Ine converlence of the subscher Wfule we believe Ine sources of our Informa- flon to be reliable, we III no way represent or guaranlee the accuracy thereof nor of thc stotements mod!! herein Pony adlon to be by the should be bcued on hiS own mveshgatlon and Information Janney Montgomery Scofl, tnc, as a corporaTIon, ond Its officers or employees, may now have, or may later poSitions ar trodes In reSpect to ony sCQJntles mentioned In thiS or any future 15sue, and such poSition may be ddferenl from any views now or hereafter expressed In thiS or any (lther Issue Janney Montgomery Scali, Inc, which IS reglslt!red With the SEC os on Investment adVisor, moy give adVICe to Its Investment odvlOry ond othel customen Independently of ony statements mode In thiS or 10 any other Issue Further mform(\lon on any securrty mentioned herem IS aVailable On request

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Tabell’s Market Letter – September 28, 1979

Tabell’s Market Letter – September 28, 1979

Tabell's Market Letter - September 28, 1979
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TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON. NEW JERSEY 08540 DIVISION OF' MEMBEfI NEW YORK STOCK eXCHANGE, INC. MEMBER AMERICAN STOCK EXCHANGE September 28, 1979 It is often dangerous to anthropomorphize an institution such as the stock market, but, if one looks — '-lWIS.st-weeks p-ricrreliaVior, -tne-overwhe1minlfimpressloniS'one -ofjjervousness7 Kaffiiftetlly is plenty to be nervous about. As suggested last week, it is difficult to pinpoint just what, precisely, 400-per-ounce gold means as far as the stock market is concerned. It is also difficult to assess the exact impact of short-term money rates approaching 12 except to suggest that they are hardly bullish. Such rates obviously continue to make alternative forms of investment relatively attractive vis-a-vis stocks and increase the borrowing cost of carrying stocks. The foregoing negatives are piled upon a skyrocketing rate of inflation, a rising money supply, and, as an election year approaches, continuing reminders of both the actual and alleged shortcomings of the present administration. Under these conditions, it is hardly surprising to see a market which, after posting a near-record advance to a new high, as the Dow did on September 20, totally fail to hold that gain as it did in Friday's trading, and then plunge sharply as it did on Monday. Equally typical is a market such as Tuesday's which continued the previous day's slide, and then recovered almost totally in the final hour, fOllowed by one which extended the prior day's rally and then lost almost all that gain at the tail-end of the day. Meanwhile, the financial commentary seems to be focused more and more one these erratic short-term swings and less on basic trends and fundamentals. We have been trying to establish in these letters our belief that, as of mid-August at any rate, bull- market conditions existed. We have, in the past, likened the management of money under such condi- tions to the process of driving a car at night. The obvious requirements are that one should remain alert and carefully inspect that which is taking place within the range of one's headlights. Obsessive worry about what obstacles mayor may not lie beyond the range of the headlights can produce nothing but schizophrenia. The relative point in the present instance, it seems to us, is that, at least until headlights available revealed the stoc1\; market ahead to be free of obstacles. Whatever threats may have developed in the past three or four weeks seem — to be of potential rather than actual significance One fear, for example, that appears to preoccupy many investors is a repetition of the sharp intermediate-term crash of October a year ago. (Actually, if one is looking for significance in anniversaries, an even more significant one is occurring in September-October, 1979. That, of course, is the 50th anniversary of the 1929 crash, an anniversary which we do not intend to allow to pass without comment next month.) In any case, we pointed out a fortnight ago that the potential distributional pattern which had formed bore no resemblance whatsoever to that which had formed during the summer of 1978. Despite the fact that an area of potential distribution has continued to build, centering around 880- 890 on the Dow, that area is still of significantly less magnitude than the one which preceded last year's Halloween Massacre. Just as generals have a tendency to fight the last war, bearish analysts seem to be enamored with protecting us against the last down-swing. It is seldom a productive exercise. None of this is to say that areas of possible concern are, at the moment, totally lacking. For the technician, one such area must be breadth action which, since mid-August, has been, in a word, abysmal. This is taking place at a time when a fair number of market averages (although not the Dow against which breadth is usually measured) have moved into new high territory while all breadth measurements remain below their levels of September, 1978. This sort of action sets the scene for a divergence of the classic sort It must, however, be remembered that breadth divergences, historically, have taken place Over protracted periods of time, and there have often been long lags between new highs in the averages and ultimate confirmation by market breadth. We are inclined, therefore, to give this factor, for the time being, at least, the benefit of the doubt. Still another potential area of concern is the lack of confirmation of the Dow's new high by either the Transportation or Utility averages. Here again, it is perfectly true that such confirmation is lack- ing as of the present date. It is, however, certainly not impossible for later Utility and Transport strength to bring these averages once again into gear on the upside. What we are saying, in summary, is that any market which has advanced as sharply as the current one did during the summer rally of 1979 is vulnerable to a short-term correction. What needs to be assessed is the risk that such a correction, if it occurs, might develop into something of more serious import. Our own assessment, based on the evidence presently available, does not indicate such vul- nerability. We think, therefore, that a continued aggressive attitude toward the equity market appears warranted. ANTHONY W. TABELL Dow-Jones Industrials (12 00 PM) 886.60 DELAFIELD, HARVEY, TABELL S & P Composite (12 00 PM) 110.18 \ Cumulative Index (9/27/79) 798.18 No stotement or expressIon of opinion or any other motter herein contOlned Is, or IS to be deemed 10 be, dIrectly or Indncc!ly, on offer or the 50licllollon of on oFfel to buy or sell any secunty referred 10 or mentIOned The marter presen1ed merely for the of Ihe subScriber While we beheve Ihe sourl;es of our Informa- tion 10 bl! reliable, we In no way represent or guarantee the accuracy thereof nor of the statements mode herem Any aellon 10 be by the subSCriber should be based on hiS own ,vestlgollon and mformaHon Janney Monlgomery Scali, fnc, as a corporohon, and ,ts offICers Or employees, may now have, or may laler role, poslhans or trades 10 respect to any securlt,es mentioned In thiS or any future 's,ue, and such POSITion may be different from any views now or hereafter expressed In th,s or any olher Issue Janney Montgomery cott, Inc, wh,ch IS registered w,th the SEC as an ,nvestment adVisor, may give adv,ce to Its Inveslment advlilory and olhe, customers Independenlly of any statements made In thiS or In any ather 'ssue Further Information on any secunly menhoned herein ,s avmlable on request

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